The capacitor voltage imbalance is a critical issue of five-level diode-clamped converters (5L-DCC). To address this issue, an inner-hexagon-vector-decomposition based space vector modulation (VDSVM-H1) approach is provided in the literature, which obtains the capacitor voltage balancing with high modulation index and high power factor but renders some drawbacks. To overcome these shortcomings, a novel capacitor voltage balancing method is proposed here. First, the previous VDSVM-H1 approach is modified by introducing six new vector sequences to each triangle and applying a new vector selection rule such that the converter will not violate the 5L-DCC switching mechanism in all operating conditions. Second, the variation of the line-to-line voltage output in one sampling period is restricted to one-or two-level in the optimized region, instead of the three-level in the previous VDSVM-H1 approach, which means less harmonics generating in the ac-side outputs. Finally, the simulation and experimental results show that the proposed method can improve the VDSVM-H1 with convincing results.Index Terms-Capacitor voltage balancing, five-level diode clamped converter, high modulation index, high power factor, total harmonic distortion (THD). 0885-8993 (c)